Nigeria's Economic Divide: Lagos and Abuja Outperform, Tax Structure Under Scrutiny

Lagos State in Nigeria is more than just a state; it functions like a country, boasting economic indices that rival or surpass those of Liberia, Sierra Leone, and Togo, and compete favorably with Ghana and Cote d'Ivoire. The Federal Capital Territory, Abuja, is also rapidly developing along a similar trajectory.

In contrast, Nigeria's other 35 states struggle with weak financial profiles and revenue generation. Their treasuries are often described as chaotic, a situation that should prompt stakeholders to act. A comparison of VAT and Internally Generated Revenue (IGR) figures across the states reveals a "dizzying" disparity between Lagos and Abuja and the rest, highlighting a fundamental issue in the nation's development.

This imbalance is attributed, in part, to the structure of the country's tax system, specifically how the Pay As You Earn (PAYE) tax is shared. The article argues that Nigeria's federal structure, which remains largely unchanged since its inception, negatively impacts development. Elected officials and economic planners are urged to speak up about these disparities, as their silence benefits no one and hinders nationwide progress. The current situation, driven by factors including the tax system, does not align with the nation's developmental needs.